Unifi, Inc. New · NYSE:UFI
Unifi, Inc. New — Unifi — Investor Day (September 2013)
49 slides from Unifi, Inc. New's investor day presentation, Sep 16, 2013
Slide 1: 7th Annual Investor Update Meeting
7th Annual Investor Update Meeting September 16, 2013
Slide 2: Cautionary Statement
Cautionary Statement 2 Certain statements included herein contain forward-looking statements within the meaning of federal securities laws about the financial condition and results of operations of Unifi, Inc. (the “Company”) that are based on management’s beliefs, assumptions and expectations about
Slide 3: Unifi Company and Market Overview
UNIFI Company and Market Overview 3
Slide 4: Unifi Overview
Unifi, Inc. is a diversified manufacturer of multi-filament polyester and nylon yarns The Company’s product offerings include specialty and premier value-added yarns with enhanced performance characteristics The Company sells to other yarn manufacturers, knitters and weavers that produce fabric for
Slide 5: Our Manufacturing Process
5 Our Manufacturing Process PET and rPET* Chip POY Manufacturing Yarn Texturing Value-Added Processes – Dyeing, Covering, Twisting, Beaming, Solution and Package Dyed
Slide 6: Who We Are: Sales by Asset Location
6 Manufacturing & Office Sales Office Joint Venture Consolidated Sales by Asset Location ($714 million FY 2013) Who We Are Our assets are well-positioned to leverage regional and global growth in synthetics
Slide 7: Growing Global Textile Fibers Market
Growing Global Textile Fibers Market 7 ___________________________ Source: PCI Fibers Global consumption of textile fibers grows based on population and affluence Global Textile Markets Approximately 180 billion pounds of textile fibers sold annually 3% to 4% annual growth in global textile fibers p
Slide 8: U.S. Customer & Channel Segmentation – FY 2013
U.S. Customer & Channel Segmentation – FY 2013 ___________________________ 2012/2011 Estimates for combined Apparel and Hosiery segments Note: U.S. figures refers to Unifi operations in USA and El Salvador U.S. Sales by Customer 8 Strong diversity of customer base and distribution channels Distribut
Slide 9: Leading Market Position
Leading Market Position ___________________________ Polyester market position includes Unifi sales of Polyester Textured Yarn, Draw Warp, and POY external sales to other U.S. domestic DTY producers Other domestic competition sales excludes Polyester Textured Yarn and Draw Warp made with Unifi POY Un
Slide 10: Leading Market Position
Leading Market Position ___________________________ Polyester market position includes Unifi sales of Polyester Textured Yarn, Draw Warp, and POY external sales to other U.S. domestic DTY producers Other domestic competition sales excludes Polyester Textured Yarn and Draw Warp made with Unifi POY Un
Slide 11: U.S. Market Segmentation – FY 2013
U.S. Market Segmentation – FY 2013 Diverse product offering sells into the apparel, hosiery, industrial, furnishings, and automotive markets Compliant yarn sales account for approximately 64% of the Company’s U.S. sales Large majority of U.S. customers are domestic weavers and knitters Most free tra
Slide 12: U.S. Synthetic Apparel Sourcing Trends
U.S. Synthetic Apparel Sourcing Trends Regional: Units grew 7% and 5% in ‘11 and ‘12; expected to grow 5% to 7% in ‘13 ___________________________ Source: Internal Estimates, Federal Reserve, OTEXA, and Census Bureau Supply Share by Region 12
Slide 13: Regional Production Share of our Market Segments
Regional Production Share of our Market Segments 13 Region includes NAFTA, CAFTA and Colombia/Peru FTA countries Our Region… an essential part of the retail supply base Finished Product Production share ___________________________ Source: CY 2012 Unifi Internal Estimates Regional production use dome
Slide 14: Trans-Pacific Partnership (TPP) Update
Trans-Pacific Partnership (TPP) Update 14 Yarn forward Basket Market Access Duty reduction Customs enforcement Time to implement Negotiations Ratification TPP Countries
Slide 15: Unifi Business Strategy
Unifi Business Strategey 15
Slide 16: Our Business Strategy
Our Business Strategy 16 Drive financial improvement to our core business through a rigorous and disciplined improvement process Manufacturing excellence (Lean, SPC) Rigorous price analysis and management Enrich our product mix by aggressively growing our Premier Value Added products and increasing
Slide 17: Unifi Repreve Renewables
Unifi Repreve Renewables 17
Slide 18: Repreve Renewables
Repreve Renewables Exclucisve licens of Proprietary miscanthus x giganteus variety developed by mississippi state university as dedicated energy crop for the SE US desirable biomass feedstock high yields per acre up to 20+ tons/ a high energy content 15.5 mm btu / ton low moisture content at harvest
Slide 19: Estimated Feedstock Revenue in U.S.
Estimated Feedstock Revenue in U.S. 19 ___________________________ Source: Internal estimates and various external sources
Slide 20: Repreve Renewables Status
Repreve Renewables Status Still a “Start-up” Commercial scale planting process developed 1-4 year yields meeting expectations Viable commercial sales models developed Short Term Plan (next year) Aggressively sell into markets available to us today Bio Bedding Chemtex Bio-fuels Confirm viable sales m
Slide 21: Unifi Operating Environment
unifi operating enviroment 21
Slide 22: North America Polyester Raw Material Trends
. North America Polyester Raw material trends ___________________________ Source: PCI Fibers, Unifi internal estimates Continuing raw material volatility puts pressure on our business to review and adjust our pricing strategy on regular basis 22
Slide 23: PX: Feedstock to PTA, Key Polyester Raw Materials
PX (Para xylene): Feedstock to PTA, Key Polyester Raw Materials 23 ___________________________ Source: PCI Fibers Global PX Supply tight in 2012 and 2013…New capacities in 2014 and 2015 expected to ease supply tightness..
Slide 24: Manufacturing Excellence Continues
Manufacturing Excellence 24 Continues Operational and Process Improvement Low cost commodity production Market segment pricing strategy Lean Manufacturing Completed 75 projects over the last 3 years Around 20 active on-going projects Product Mix Enrichment PVA and specialty product strategy Lot Chan
Slide 25: Unifi PVA - Premier Value Added Products
Unifi PVA - Premier Value Added Products
Slide 26: Global PVA Sales Revenue by Fiscal Year
Global PVA Sales Revenue by Fiscal Year PVA portfolio represented approximately 20% of consolidated sales in fiscal 2013 Products utilized in apparel, contract, home furnishings, military, socks and hospitality Steady investment in R&D and commercialization of PVA products remains a strategic priori
Slide 27: Our PVA Brands
Our PVA Brands 27 Touch & Texture Performance Sustainability
Slide 28: REPREVE Recycled Fiber Brand
Made from recycled materials; including post-consumer plastic bottles & post-industrial fiber waste Product Transparency & Authenticity SCS Certified for recycled content claims; Oeko-Tex certified Program provides transparency throughout the supply chain with Unifi’s unique & proprietary Fiberprint
Slide 29: Patagonia
Patagonia A\ Hon POLARTEC Allsteel’ KO) REPQ@EVE o LIFE KHAKT uN <> CintAS Hrerersones SAVANE, Timbertand © vitamin Aa 7 patagonia Patagonia A\ Hon Z\ Hon | Pouaktéc POLARTEC Allsteel Allsteel Bluse Blue, Bosse haggar 5 2 e Hon A\. POLARTEC Patagonia Hon /\ POLARTEC Patagonia Allsteel Blue, @ Z\ Hon
Slide 30: Commitment to Innovation
Commitment to Innovation Planned FY 2014 RRC Expansion 30
Slide 31: PREPREVE
51 42 Z {|17 PRE P@EVE IT’S WHAT'S IN IT”
Slide 32: Repreve Recycling Partner
REP@EVE G PROUD RECYCLING ‘ ~, »" PARTNER
Slide 33: Herff Jones Caps and Gowns
Herff Jones’ Renew = 29 Bottles Oak Hall GreenWeaver = 27 Bottles REPREVE® based cap & gowns were worn at over 480 schools. 33
Slide 34: REPREVE Current and Upcoming Brand Programs
RE PQ@EVE ‘CURRENT 2013 UPCOMING 2014/2015 Sorbtek Brand K o\§ ‘Tinberland & DOCKERS CKERS .eb0K “Cressi g. Product Cowal pants & sins 2013 & 2014 Focus Eletie and Fusion vehicles NFL Replica jerseys Graphic thins Motion Comfort khaki ‘Mesh performance tee Men'sB0ys' Diamond Dobby board shorts Women
Slide 35: Sports Names You Need to Know
Sports Names You Need to Know THE WALL STREET JOURNAL. i The New ork Cimes
Slide 36: Commitment to Sustainability
Commitment to Sustainability Long history of sustainability On-site environmental team constantly reviews every aspect of manufacturing to see how we can reduce, reuse and conserve. Operate Fleet of Trucks; direct ship from our plants to our customers to reduce energy costs Use of Returnable Packagi
Slide 37: Unifi Brazil Unifi China International Segment
37 Unifi Brazil Unifi China international segment
Slide 38: International Segment Trends
International Segment Trends 38 State of the Economy – Inflation, exchange rate Imported textured yarn pressure on the commodity segment Change in local incentive program – VAT Recovery Underway: Reduction in POY import duty Product mix enrichment Price increase strategy to improve margins Brazil Dy
Slide 39: Financial Overview
UNIFT. Financial Overview 39
Slide 40: Liquidity and Debt Highlights
Liquidity and Debt Highlights 40 U.S. $85mm interest rate swap; declines $5mm per qtr.; until reaches $50mm in May 2015 LIBOR is fixed at 1.06%; hedge terminates in May 2017
Slide 41: $150 MM ABL Facility Matures May 2018
$150 MM ABL Facility Matures May 2018 Secured by, among other things, eligible working capital, PP&E and PAL No on-going maintenance covenants, as long as availability exceeds the greater of $10 mm or 20% of maximum Revolver amount No restricted payment limitations, as long as availability exceeds $
Slide 42: Capital Allocation Strategy
Capital Allocation Strategy 42 Maintain healthy balance sheet and sufficient domestic liquidity Appropriately fund our business strategy Working capital and capital expenditure requirements to support current mix enrichment and PVA growth strategies Selected growth opportunities related to our core
Slide 43: Cash Generation Trends
43 ___________________________ FY 2014 Estimate based on management’s estimates of: adjusted EBITDA based on range communicated during the Company’s July 25, 2013 Earnings Conference Call; future annual capital expenditures (as disclosed in Form 10-k for the fiscal year ended June 30th, 2013); cash
Slide 44: Questions
‘i aomaagsige , ainda Wwe Questions 44
Slide 45: Appendix Slides
UNIFT. Appendix Slides 45
Slide 46: Unifi, Inc. - Adjusted EBITDA Reconciliation
Unifi, Inc. - Adjusted EBITDA Reconciliation (Dollars in thousands) FY 2010 FY 2011 FY 2012 FY 2013 Net income attributable to Unifi $10,685 $25,089 $11,491 $16,635 Interest expense, net 18,764 16,679 14,152 3,791 Provision (benefit) for income taxes 7,686 7,333 (1,979) 13,344 Depreciation and amort
Slide 47: Non-GAAP Financial Measures
Non-GAAP Financial Measures 47 Included in this presentation are certain non-GAAP financial measures designed to complement the financial information presented in accordance with generally accepted accounting principles in the United States of America ("GAAP") because management believes such measur
Slide 48: Continued Non-GAAP Financial Measures
Continued Non-GAAP Financial Measures 48 In evaluating EBITDA, Adjusted EBITDA including equity affiliates, Adjusted EBITDA, EBITDA cash generation and Total cash generation, you should be aware that in the future we may incur expenses similar to the adjustments in this presentation. Our presentatio
Slide 49: Unifi
unifi 49